Asian markets surge on US rate cut, Wall Street surge

DPA Tokyo, March 19 (DPA) Asia-Pacific stock markets rallied in early trading Wednesday, spurred by a Wall Street surge and a big cut in interest rates by the US Federal Reserve. Japan’s Nikkei 225 Stock Average gained 328.57 points, or 2.75 percent, to trade at 12,292.73. At one point in morning trading, the Nikkei rose more than 400 points.

The broader Topix index of all first-section issues was up 35.04 points, or 3.01 percent, at 1,198.67.

The jumps in Tokyo were seen after trading Tuesday in the United States saw the blue-chip Dow Jones Industrial Average soaring 3.51 percent, the broader Standard & Poor’s 500 Index 4.24 percent and the technology-heavy Nasdaq Composite Index 4.19 percent.

The gains came after the US central bank cut its benchmark interest rate and two leading investment firms posted earnings that assuaged worries about the US financial sector.

The Federal Reserve cut its benchmark interest rate by 0.75 points to 2.25 percent in the latest of a series of dramatic attempts to boost the sagging US economy and temper volatility in global financial markets.

The gains on Wall Street came in spite of concerns by many analysts that the Bush administration failed to grasp the deeply rooted problems brought on by unsustainable financial policies.

Speaking in the New Zealand capital Wellington on Wednesday, Nobel Prize winning economist Joseph Stiglitz said the current financial crisis is the worst the world has seen since the Great Depression of the 1930s and the US Federal Reserve move to cut interest rates will not make much difference.

“It will have some impact - it will do a little bit to stem the blood - but it’s not addressing the fundamental problems underlying the collapse of the financial sector,” he told Radio New Zealand.

Elsewhere in Asia, by midday the Hang Seng Index was up 690.19 points, or 3.23 per cent, at 22,074.8 points. Turnover was 44.7 billion Hong Kong dollars ($5.75 billion).

Singapore stocks were up about 2 per cent, trading 2,891.73 at midday. South Korea’s Seoul Composite was also up 2.51 percent, or 39.92 points, at 1,628.67.

After days of trading in the red, India’s benchmark Sensex was up 3.3 per cent in early trade as investment funds bought heavily.

Australian stocks saw a second day of recovery in the financial services sector propelling stocks to a strong finish Wednesday. DPA